Proposed Industrial Park Project: Construction Industry Development, Company Structures, and Contract Types

This article discusses the development of the construction industry, company structures, and contract types in the proposed industrial park project. It also covers modern construction processes and contract planning techniques for micro and macro projects.

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PROPOSED INDUSTRIAL PARK PROJECT
Name
Course
Professor
University
City/state
Date

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Proposed Industrial Park Project
Task 1
a) How construction industry has developed
The development of construction industry over the years cannot be overemphasized. The
industry’s transformation has been driven mainly by changes to the needs and wants of clients,
technology and other global problems such as climate change. There are different ways in which
the construction industry has changed including: digitalization of construction documents using
blueprint apps for documents such as plans, records, permits, stakeholder communication, safety
inspections, etc.; use of smart gadgets at different phases of the project; use of internet; use of
computer aided design (CAD); adoption of construction management software; improved health
& safety legislation and standards (Whirlwind, 2015); use of technological tools and processes
such as drones, robots, building information modelling (BIM), lean construction, automated
systems, etc.; and increased demand for complex projects. This development has also had an
impact on professionalism in the industry. It has raised the level of qualifications and skills base
for experts/employees in the industry (Leominster Construction, 2013). These experts are
required to acquire and adopt skills that match the current demands. These skills and
qualifications include use of modern technologies, understanding of current health and safety
standards, coordination and collaboration techniques, project management approaches, and
sustainability issues. Continuous professional development is also very essential for
professionals in the industry to remain competent and relevant.
b) Scope and linkage between construction parties

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The client is responsible for selecting the qualified company and other independent
experts for the execution of the project. Depending on the type of contract being used, the client
can develop a selection criteria for the project team and construction company. All parties
involved in the project must coordinate and collaborate throughout the project. They should
building business and professional relationships for the current project and may also decide to
form partnerships or joint ventures in future projects. Within a construction organization,
professionals from different departments must also work as one team. The parties that do not
have technical knowledge about the project should also be helped to understand it in the simplest
terms possible. In the proposed industrial park project, all parties involved in the construction of
the industrial buildings, factories and inter-connecting infrastructure should work as one team.
This includes all members of the project and design teams, contractors, subcontractors, suppliers,
independent experts and workers.
c) Types of contractual work
The different types of contractual work include:
Lump sum contract – this is also called fixed-price contract. In this contract, the total cost
for all works related to the project is fixed. The contractor can get incentives in case of early
completion or penalties for late completion.
Cost-plus contract – this is where the client pays the contractor the actual costs or
expenses incurred in executing the project, plus profit and overhead. The cost plus contract can
be cost-plus fixed percentage, cost-plus fixed fee or cost-plus fixed fee with guaranteed
maximum price.

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Unit price contract – this is where the project is divided into different items then unit
prices of these items are used to calculate the contract price.
Incentive contract – this is where the contractor is paid depending on his performance in
relation to the project targets of schedule, budget and quality.
Guaranteed maximum price contract – this is where the contractor is compensated
depending on the actual cost incurred plus a fixed fee.
Materials and time contract – this is where the client pays for the materials and time that
the contractor spends on the project (Brown, 2016). Here, the client bears more risks because he
is responsible for cost overruns.
The best contract type for the proposed industrial park project is cost-plus contract. This
contract type is suitable for projects with greater uncertainty or if there is a big cost fluctuation
for materials, labour and equipment. Since the margin of the contractor is fixed, the client has a
chance of saving money by adopting techniques that will ensure lower incurred costs than
estimated costs. This type of contract also delivers high quality work (UpCounsel, (n.d.)).
d) Development of construction companies’ structure
The company structures in construction industry have also changed significantly over the
years with all parties, including employees, now being given a chance to be part of decision
making. Originally, company structures were purely vertical where decisions were made at the
top and those at the bottom required to follow without questioning. These structures were very
rigid with minimal information exchange. Today, company structures are more horizontal where
decisions are made after consulting all members of the structure and considering their opinions.
Companies are also giving room for external consultations to enhance their competitiveness.

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Another important elements of today’s company structures are specialists in various issues such
as sustainability, innovation and technology. There is now more room for communication,
consultation, collaboration, coordination and participation among members of the company
structure (Lohrey, 2018). Examples of organizational structures used today are: functional
structure, divisional structure, matrix structure and flatarchy structure (Karell, 2018). The best
company structure for the proposed industrial park project is flatarchy. This structure removes
barriers to communication and collaboration and at the same times removes unnecessary layers
in an organization allowing members to share their knowledge and experience about the project
(Alton, 2017). The proposed project requires coordination and collaboration and flatarchy
structure allows parties to communicate freely, broaden their skills, develop their
professionalism and consult effectively.
e) Development of construction companies’ structure and business ethos
Over the years, construction companies have been changing their organizational
structures from vertical hierarchies to horizontal hierarchies. This is so as to improve
decision-making process by allowing coordination, communication, collaboration and
consultation among all members of the company, from the top management to employees.
The horizontal structures allow members to share their knowledge and experience, work with
transparency, build trust among themselves and feel to be part of the company. Most
companies’ ethos have also changed significantly and now includes values such as quality,
environmental awareness, sustainability, customer satisfaction and experience, social
responsibility, professionalism, safety culture, reputation and teamwork. The development in
organizational structures of construction companies and business ethos will play a key role in
successful delivery of the proposed industrial park project. These developments will facilitate

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consultation, coordination and communication among all stakeholders involved in the project
thus improving decision-making. It will also enable stakeholders to share their knowledge
and experience, and work as one team towards a common goal. It will also help in ensuring
that the project delivered has positive economic, social and environmental impacts
throughout its lifecycle.
Task 2
a) Types of construction companies
There are different types of construction companies depending on the job is performed by the
company such as land acquisition, design, execution, financial planning, operation, maintenance
and paper work (Mishra, 2017). The main types of construction companies are:
Small renovation contractors – these are companies that work on projects that do not
require large construction organization or estimating and the ones that require small capital. They
usually do small office, commercial or home renovation works.
General contractors – these are experienced companies that take on large projects such as
new buildings or renovation works. The companies usually subcontract a large percentage of the
work.
Owner-builder – these are companies that construct buildings for their own ownership for
the purposes of selling or renting upon completion.
Real-estate developers – these are companies that construct buildings either for personal
ownership or for selling them before or after they have been completed.

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Professional construction manager/company – these are companies that oversee
execution of construction projects on behalf of their clients. The company is responsible for
subcontracting the works packages and overseeing the entire project.
Program manager – these are companies that perform the same services as the general
contractor and professional construction manager and goes beyond to include program
management. After completing the project, the program manager usually continues to manage
the operations of the project.
Package builders – these are companies that usually take on design and construct building
projects. They can also subcontract the design package to independent engineers or architects.
Sponsor-builder – these are companies that signs contracts with governments to
implement subsidized projects.
The most appropriate type of company for the proposed project in the scenario is
professional construction manager/company. This is because the professional construction
manager/company has the capacity (resources, expertise and experience) to implement such
complex projects that comprise of different packages (industrial buildings, factories and
interconnecting infrastructure). This is a relatively complex project and therefore the client
(private developer) needs a professional company that will execute the project on his behalf.
b) Relationship between companies working on a construction project
This being a commercial & industrial project, the main type of relationship that is likely
to exist between companies working on the project is business relationship. The companies
working together (including contractors, subcontractors and suppliers) will network with each
other and maintain positive relationships throughout the project (Tan, et al., 2017). They will be

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working together for mentoring, social support, role model and service of others (Steinlage,
(n.d.)). The project is likely to take long and therefore these companies should develop a friendly
and healthy project culture, communicate and collaborate with each other freely, build trust
amongst themselves and work towards a common goal – delivering the project successfully
(Nikinosheri & Staxang, 2016).
c) Link connecting construction companies
There are several links that connect construction companies. Some of these include:
investment links, partnerships, public links, customer links, employee links, customer links and
customer experience (Spacey, 2018). The construction project in this scenario entails a variety of
works packages that require specialized contractors, subcontractors, suppliers and operatives.
The companies involved in construction projects must work collaboratively to achieve common
goals. They have to share their knowledge and experience in relation to construction materials
and methods, industry regulations, innovative technologies, management techniques, etc. Most
importantly is that they have to work so as to make profits and protect the reputation of their
professionalism.
d) Main differentiating factors between construction company contracts and tenders
The main factors that differentiate between construction company contracts and tenders are as
follows:
Documents – a tender consists of documents with details of the project works and
execution conditions that need to be filled with bidding construction companies. The tender
documents do not bind the construction company to perform the work. A contract consists of

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tender documents that have already been filled by the selected construction company. The
contract document binds the construction company to perform the work.
Purpose – the purpose of tender is to invite interested construction companies to bid for
the project while the purpose of contract is to sign an agreement with the qualified or selected
company to implement the project.
Timing – tenders are documents issued to construction companies to bid for the project
(before the start of bidding process) while contracts are documents signed after the bidding
process has been completed.
Parties involved – tenders are usually offered to many contractors who are willing to bid
for the project while contracts are only signed between the client and the contractor who has
been selected to execute the project.
Task 3
a) Modern construction processes and sequences
Most of the modern construction processes and sequences are technologically driven. Some of
these processes include the following:
Precast flat panel systems – this is the process where floor and wall units of a building are
manufactured offsite in different factories and brought to the site for assembling, such as the one
shown in Figure 1 below.

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Figure 1: Example of precast flat panel process (Arjun, 2017)
3D volumetric construction (modular construction) – this is the process where 3D
modules are manufactured offsite with complete finishes and services then transported to the site
where they are assembled one by one (NHBC Foundation, 2016).
Flat slab construction – this is the process of constructing flat slabs using panelized
formwork systems with no interference of horizontal services installation.
Precast concrete foundation – this is the process of constructing individual components of
the foundation separately offsite and transporting them to the site for assembling (The Concrete
Centre, (n.d.)).
Twin wall technology – this is the process of erecting two thin wall slabs and fling the
space between them with concrete to make a complete wall. Figure 2 below shows construction
process of a twin wall.

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Figure 2: Twin wall construction (Arjun, 2017)
Insulating concrete formwork – this is the process where a wall is built using twin walled
panels (formwork) made from blocks or polystyrene panels. The formwork panels are then filled
with ready-mixed concrete to make walls.
Hybrid construction – this is the process that combined at least two of the aforementioned
construction processes.
These processes and sequences respond to sustainability needs of the industrial park
project by minimizing the amount of resources needed and wastage throughout the project’s
lifecycle. The processes also respond to sustainability needs by reducing the cost of construction,
reducing construction time, increasing quality of work, reducing labour needs, minimizing
carbon footprint and increasing productivity (Kempton & Syms, 2009).
b) Contract planning techniques
Project planning basically involves listing activities of the project, developing schedules for
these activities and determining/allocating resources for these activities. The following are some
of the contract planning techniques for micro and macro projects:

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Bar charts – this is the simplest project planning technique. It basically entails plotting
different project activities or work packages against resources needed (such as time, costs,
operatives, etc.)
Critical path method – this is the process of linking all activities of the project depending
on how their execution depends on each other. The technique mainly entails determining the start
and finish dates of each activity.
Line of balance – this technique involves scheduling repetitive activities where resources
required for each activity are located to avoid delay of subsequent activities (Rodriguez, 2018).
Precedence diagram – this technique is mainly used for macro projects. In this technique,
a schedule of the project is developed showing project activities, early/late start date, early/late
finish date, duration and relationship between activities (Usmani, 2012). It also shows what-if,
most likely, best-case and worst-case scenarios.
The overall project planning techniques include: defining the project scope, developing
the work breakdown structure (WBS), estimating work for each package and identifying
resources needed, identify project deliverables’ major risks and developing the project schedule
using above-mentioned tools (Billows, 2017).
c) Impacts of BIM
Building Information Modeling (BIM) impacts on the following aspects of the proposed
project’s construction and operations: it enhances coordination and collaboration of construction
companies, it optimizes, it speeds up construction process, it optimizes the schedule and cost of
the project during construction, improves safety during construction process (Suemann, 2009), it
helps in risk detection and mitigation by the construction companies, it minimizes disputes and

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conflicts among construction and operation companies, it enables easy maintenance by the
operations companies, it improves construction and operation flexibility, it helps in minimizing
carbon emissions by construction and operation companies, it helps in lowering maintenance
costs by the operations companies, it facilitates faster project delivery by the construction
companies, and it improves quality during construction and operation processes (Goubau, 2016).
d) How construction has developed
Construction has developed greatly over the years mainly because of technology. Most
construction processes today are completed using advanced technological tools. Innovation has
made it possible to develop efficient designs of different structures, analyze them, create
prototypes/models, improve the models, visualize the whole project, customize the project, select
the most efficient materials and complete the project using efficient construction methods.
Innovation has also changed the tendering process by significantly reducing paperwork. Major
tendering processes are done digitally enabling companies to participate irrespective of their
geographical locations. Most importantly is that innovation has significantly revolutionized the
operation and management of projects once they are complete. Most of the modern buildings
have automated systems that control different elements such as lighting, electrical appliances, air
conditioning, water consumption, etc. All the innovation aspects of these projects have been
enabled by BIM. The most fundamental function of BIM is to enhance information sharing,
collaboration and coordination of all stakeholders involved in the project throughout its lifecycle.
The developments in the construction industry, including BIM, modern construction
methods, innovation, etc., will benefit th proposed industrial park project by: lowering costs,
improving coordination and collaboration of companies and stakeholders involved, reducing
carbon footprint, improving quality of work, facilitating faster completion, improving safety of

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the project, reducing error and variations, lowering project risks, improving productivity,
improving design and visualization of the project, increasing financial control, easing
maintenance, facilitate and support decision-making, and increase revenues collected from the
project (Mesaros & Mandicak, 2017).
Task 4
a) How health & safety has become an integral part of the construction process
Construction sites are prone to a broad range of health & safety risks. The risks have
numerous economic and social impacts (Fatih & Celebi, 2015). This has made health & safety
become an integral part of the construction process in efforts by stakeholders to reduce the
number of injuries and deaths in the construction industry (Bianca, 2017). This has been
achieved mainly by taking into account health & safety factor during planning and design stages
of a construction project. Construction companies are required to ensure that all health & safety
aspects have been considered before starting any construction work. This including developing
and adopting a health & safety plan that outlines strategies put in place to improve safety of
construction workers such as wearing appropriate personal protective equipment, training
employees, employing qualified and certified personnel, strict supervision, clear communication
procedures, etc. This issue has become very important such that the government has formulated
health & safety policies and regulations that must be adhered to by construction companies,
failure to which attracts heavy penalties.
b) Government legislation on health & safety
The UK government has developed adequate legislation to improve safety of workers on
construction sites. The legislation outlines the responsibilities of each stakeholder involved in

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construction projects (including the client, principal contractor, principle designer, designers,
contractors and workers) and the consequences in case these stakeholders fail to adhere to the
regulations. Some of the legislation entail formulation of construction health & safety regulations
such as Construction (Design and Management) Regulations 2015 (CDM 2015), Manual
Handling Operations Regulations, Work at Height Regulations, Personal Protective Equipment at
Work Regulations, Health and Safety at Work Act, Workplace (Health Safety and Welfare)
Regulations, Gas Safety Regulations, Lifting Operations and Lifting Equipment Regulations, etc.
The agency responsible for these regulations is the Health and Safety Executive (HSE) (Health
and Safety Executive, (n.d.)).
c) Role of coordination and collaboration
Coordination and collaboration plays a very key role in ensuring safe working practices
mainly because it helps in ensuring that all stakeholders are fully informed about the common
health & safety goals and strategies on how to achieve them (including training), enables faster
reporting and response to safety incidents, enables sharing of knowledge and experiences on how
to enhance safety on site (Sparer, et al., 2016), enables the whole team to solve safety issues
together, enables the stakeholders to identify, analyze, prevent, eliminate or manage safety risks
as one team, and makes the entire team responsible for safety on site.
d) How construction industry has benefited
Changes in health & safety legislation have had significant positive impacts in the
construction industry. The main benefit is the reduction in number of accidents, injuries and
deaths in the industry. Other benefits of these changes include: increased awareness of
construction safety risks, increased productivity, reduced project delays, faster project

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completion, reduced overall project costs, reduced disputes between stakeholders on who should
be responsible for non-compliance of safety regulations, and increased work quality.
e) Impact of health & safety legislation
Health & safety legislation has made stakeholders in the construction industry to be more
responsible in ensuring that construction activities are undertaken in safer environments. The
legislation defines the characteristics of safe working environment and practices, the roles and
responsibilities of each stakeholder and penalties for non-compliance. In general, the legislation
has enhanced development of a health & safety culture in the construction industry. This has
prompted stakeholders to take into account the health & safety aspect when planning and
designing the project. The main advantages of this legislation is that it minimizes health & safety
hazards and risks and their associated costs, facilitates faster project delivery, eliminates or
prevents unnecessary costs and enables successful project delivery. Nevertheless, the legislation
also has some weaknesses including: successful implementation requires subject experts that
may increase the project cost, implementation follow is quite challenging due to limited number
of public officers, resistance from construction stakeholders due to high requirements and
penalties, and it is applicable across the board irrespective of the type, complexity, size or
uniqueness of the project.

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